MCN Blogs
David Poland

By David Poland poland@moviecitynews.com

Catching Up On Iffy: Story One

It’s been a very long weekend.

Not wanting to regress into the muck – I did allow myself to indulge some Nikki Finke idiocy – I didn’t write about the oddly confused story by Steven Zeitchik and Amy Kaufman in the LA Times. The headline and sub-head: “As big movies’ box office soars, the number of flops rises Dozens of major studio releases have been struggling, creating a widening chasm between filmic haves and have-nots. Studio executives are beginning to rethink budget and creative choices.

This headline seems to be the premise with which Zeitchik and Kaufman approached this story. But what is frustrating… and increasingly predictable in LA Times industry coverage… is that the quotes from industry professionals that they report are completely rational and reasonable and the “reporters”‘ conclusions are not.

Here are just the quotes from working Hollywood:

Chris McGurk (former distributor, now leading digital cinema push) : “It’s always been the case that 20% of the movies in this town make 100% of the money. But I think you’re seeing the percentages get a lot more out of whack.”

“Ultimately, you’re going to see Hollywood go back to a broader portfolio business where they’re producing more movies across the budget spectrum. To keep doing it this way is suicide.”

Neal Moritz (producer): “With big swings sometimes come big misses. The middle has been cut out.”

“The movies that cost $100 million they’re now telling you to spend $60 million. The ones that are $60 [million] they’re telling you $35 million.”

Dan Fellman (distributor): “Maximizing the gross on a movie like ‘The Dark Knight Rises’ starts with the number of prints in the marketplace and the number of seats. We have a record number of prints and locations, and we have a record number of Imax theaters playing the movie. The reality is, you don’t want to make mistakes on your tent poles.”

Gene Harvey (exhibitor): “Things are not as steady and down the middle like they used to be. It’s so extreme now. For ‘Dark Knight,’ everyone says, ‘When is that coming out, man?’ On the lesser films, it’s like you don’t even have the poster up.…’People Like Us’— it’s unbelievable how few people come see it; you think more would at least stumble into it. But we just had a small number.”

Chris Aronson (distributor): “I believe that this business has changed into appointment movie-going instead of destination movie-going. There are a lot of alarming things about appointment movie-going, and none of them are good. I think what it does is pinch the movies in between that could be very satisfying.”

Unidentified Producer: “It seems more and more like a case where unless you have one of the few movies that makes people get off the couch, you’re in trouble. We have to look hard at which movies fit that description and concentrate on them.”

For me, the only remotely controversial comment is from Fox’s Chris Aronson… and I don’t discount his research. I just think it is the beginning of a story about this situation, not a throw-away in the middle. Its a conversation worth having. But this story doesn’t really touch it, aside to try to use it as ammo to prove what seems to be a predetermined point.

The rest is old news. Studios have been trying to pull back for the last 3 years, with a few bad exceptions.

I don’t want to pick apart every factual error in the piece, but one of the most heinous is calling Fast Five “a mid-range success in 2011 when it took in $209 million in domestic box office.” Start with the notion – ridiculous that the LAT is still playing this game – that studios make more than a couple of movies a year that are not heavily vested in the international box office. Then look at Fast Five‘s real number… $626 million worldwide, aka the 7th highest grossing film of 2011. It was a massive hit, coming off of a $125m budget and probably $100m in marketing, well into profit in theatrical alone with over $300 million in rentals (the part of gross returned to the studio) – a great rarity these days – and with almost all of the post-theatrical revenue as additional profit.

In fact, producer Neal Moritz had four studio films released in 2011. And three of the four (including Fast Five) grossed over $200 million worldwide. One was the delayed The Green Hornet, whose budget ballooned through reshoots and re-cuts, to a reported $120m. But Sony managed to push the worldwide on this Seth Rogen action comedy to $228 million. Now, without having been told the budget, would you assume that a $228m gross on a Seth Rogen action comedy should make for a huge success?

Next up, Battle Los Angeles, a low-profile, no-box-office-star action movie that did $212 million. The budget was $70 million. With around $115m in rentals, the probably didn’t clear profit on theatrical alone, but quickly got there on post-theatricals. Was the hope for a bigger gross? Sure. But did keeping the budget in line make this work out fine for Sony, Moritz, Relativity, and co-funder Original Film? Yes. In fact, it is an exemplar that already existed under the LAT’s nose, unanalyzed.

Moritz’s fourth film was The Change-Up, yet another body-changing comedy. Reported budget: $52m. Reported budget on Ryan Reynolds’ big comedy hit, The Proposal, which also starred big-money Sandra Bullock? $40m. Reported budget on Jason Bateman’s sperm-switch comedy with Jennifer Aniston, The Switch? $19m. Reported cost of Bateman’s other 2011 comedy, Horrible Bosses, with small turns from Aniston, Colin Farrell, Foxx & Spacey? $35m.

So… why was The Change-Up so expensive? That is what studios are trying to work out… even for bigger draws than Reynolds and Bateman. My guess, in this case, is that people thinking that Green Lantern would make Reynolds a superstar box office draw. They were wrong. But still, at $40m or less, Change-up would have been reasonably profitable. Instead, it may hit profit… it may not.

This is not brain surgery, folks.

(Of course, these reported budgets are not necessarily accurate. But that’s not the point. Shit happens. But visually simple comedies budgeted over $40 million are not, usually, victims of production overruns, but of over-sized negotiated salaries. Feel free to add your comments, but please understand that even these detailed points have room for more detail.)

The major studios released 103 movies (aside from their indie arms) last year. 26 of them grossed under $50m worldwide. 59 of them grossed more than $100m worldwide… 31 of those grossing over $200m worldwide. In terms of finding audiences, that’s a lot more haves than have-nots.

But the bottom line is the issue. And some of those haves are quietly money losers. And many of those have-nots are profitable.

I am not saying that there is not a growing spread between the big budgets and the small budgets and a squeeze on the middle budgets. But I am saying that statistical gamesmanship by media – like “made about half of their production budget or less at the domestic box office” – is obscene, especially in an industry that has suffered a major contraction in the last few years.

None of the four movies cited under that rubric of this story – Battleship, John Carter, Rock of Ages, Dark Shadows – could ever have projected more than 45% of their gross theatrical revenues coming from North America. In the first two cases, they are boom-boom films, which sell much better overseas. In fact, both films each grossed over $200m internationally. In the second two cases, the stars (Cruise and Depp) have seen their fortunes stay solid based primarily on their international draw. Cruise has made 10 films as a lead since 2000. None were less than 50% international. Three were under 60%, seven over 60%. One was 76% international. Of Depp’s last 10 studios films, three were under 60% (Rango, Corpse Bride, Public Enemies) and six of them were over 65%, topped by Pirates 4‘s 77% international.

As I have pointed out before, there are only 97 films that have ever grossed $500m or more. Last year’s 12 such films is the record for most in a year. The previous record was 9. So even though chasing mega-grosses is a growing preoccupation of Hollywood and hitting those numbers – whether by 3D bump, ticket price increases, or whatever – it increasingly possible, studios have continued to make more movies that need that number to be profitable at all than there are likely numbers of films that will hit that number.

And that, as Chris McGurk pointed out, needs to stop… again.

Five films have passed that mark so far this year… all but Hunger Games, mature franchises. In last year’s record-breaker, 10 of the 12 were mature franchises and two (Smurfs and Puss in Boots) had franchise history working for them.

Inception, 2012, and Mamma Mia! are really the only freak stand-alones to achieve the $500m club in the last five years of Hollywood’s chase of this golden dream.

As usual, Hollywood is a stupid place… but the people who work here, making decisions about massive amounts of money on one-off bets, are not stupid at all. They follow the money. Maybe the LA Times should do the same.

Be Sociable, Share!

One Response to “Catching Up On Iffy: Story One”

  1. sanj says:

    – So… why was The Change-Up so expensive?

    a quick imdb check says there are like 200 people
    who made this movie – did they really need 20 people
    in the music department – can anybody remember the music for this movie –

    since Neal Moritz is quoted the most – he should get a dp30 but i`m guessing he is too busy with 100 million dollar films ..

    i liked Horrible Bosses – all the characters had stories – good acting and breakout star Charlie Day.

The Hot Blog

Quote Unquotesee all »

It shows how out of it I was in trying to be in it, acknowledging that I was out of it to myself, and then thinking, “Okay, how do I stop being out of it? Well, I get some legitimate illogical narrative ideas” — some novel, you know?

So I decided on three writers that I might be able to option their material and get some producer, or myself as producer, and then get some writer to do a screenplay on it, and maybe make a movie.

And so the three projects were “Do Androids Dream of Electric Sheep,” “Naked Lunch” and a collection of Bukowski. Which, in 1975, forget it — I mean, that was nuts. Hollywood would not touch any of that, but I was looking for something commercial, and I thought that all of these things were coming.

There would be no Blade Runner if there was no Ray Bradbury. I couldn’t find Philip K. Dick. His agent didn’t even know where he was. And so I gave up.

I was walking down the street and I ran into Bradbury — he directed a play that I was going to do as an actor, so we know each other, but he yelled “hi” — and I’d forgot who he was.

So at my girlfriend Barbara Hershey’s urging — I was with her at that moment — she said, “Talk to him! That guy really wants to talk to you,” and I said “No, fuck him,” and keep walking.

But then I did, and then I realized who it was, and I thought, “Wait, he’s in that realm, maybe he knows Philip K. Dick.” I said, “You know a guy named—” “Yeah, sure — you want his phone number?”

My friend paid my rent for a year while I wrote, because it turned out we couldn’t get a writer. My friends kept on me about, well, if you can’t get a writer, then you write.”
~ Hampton Fancher

“That was the most disappointing thing to me in how this thing was played. Is that I’m on the phone with you now, after all that’s been said, and the fundamental distinction between what James is dealing with in these other cases is not actually brought to the fore. The fundamental difference is that James Franco didn’t seek to use his position to have sex with anyone. There’s not a case of that. He wasn’t using his position or status to try to solicit a sexual favor from anyone. If he had — if that were what the accusation involved — the show would not have gone on. We would have folded up shop and we would have not completed the show. Because then it would have been the same as Harvey Weinstein, or Les Moonves, or any of these cases that are fundamental to this new paradigm. Did you not notice that? Why did you not notice that? Is that not something notable to say, journalistically? Because nobody could find the voice to say it. I’m not just being rhetorical. Why is it that you and the other critics, none of you could find the voice to say, “You know, it’s not this, it’s that”? Because — let me go on and speak further to this. If you go back to the L.A. Times piece, that’s what it lacked. That’s what they were not able to deliver. The one example in the five that involved an issue of a sexual act was between James and a woman he was dating, who he was not working with. There was no professional dynamic in any capacity.

~ David Simon